Cambodia on Tuesday expressed dismay over the European Union’s plans to initiate the country’s withdrawal process from a preferential trading scheme that experts say is vital for the Cambodian economy.
Prime Minister Hun Sen’s government has called the move to withdraw Cambodia from the Everything But Arms scheme was “has a political motive to drag Cambodia into geopolitical war.”
The EU on Monday said Cambodia has one year to institute democratic and human rights reforms or face expulsion from the scheme. If reforms are not made Cambodia faces expulsion from the scheme in August 2020.
“We believe the decision has a political motive to drag Cambodia into geopolitical war. Cambodia will defend itself at all costs ... despite pressure in any form,” a statement from the government reads.
Phay Siphan, a government spokesman, said Cambodia had already surpassed the levels of GDP per capita that is usually a benchmark for membership of Everything But Arms.
“Allow me to say that the suspension or removal of EBA does not mean Cambodia loses its market in Europe. Cambodia still has a market share in Europe and we can still export. What we lose is just supremacy in competition due to tariffs,” he said.
Cecilia Malmstrom, EU commissioner, said the EU’s engagement with Cambodia “has led us to conclude that there are severe deficiencies when it comes to human rights and labor rights in Cambodia that the government needs to tackle if it wants to keep its country's privileged access to our market.”
The US Embassy has expressed similar concerns over the deteriorating political situation in the country. It called for the restoration of “true multi-party democracy” and for treason charges against the leader of the former opposition, Kem Sokha, to be dropped.
Sokha’s Cambodia National Rescue Party was banned by a court order in November 2017, just months before a crucial general election that Hun Sen’s Cambodian People’s party won outright.
Responding to the EU’s statement on Monday, the Garment Manufacturer’s Association of Cambodia said the industry “will face risks” and Cambodia’s development “halted” if the EBA withdrawal went ahead.
Eurocham, a business association and lobby group representing some 350 companies, also said it regretted the decision.
The EU is a Cambodia's biggest export market with annual exports of about $5.5 billion, providing about $600 million in profit.
